Things to Avoid While Purchasing a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves the loan. Keep in mind that until you get the keys, your lender is watching your finances very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your lender may send up red flags if you buy your appliances on your credit cards in the middle of your loan process. Using cash to purchase big items can even be a problem: most banks consider your available cash when approving your application.

Don't get a new career. Lenders look for a consistent work history on your application. Getting a new career before you apply for a loan may not jeopardize your approval at all. But for some people, switching jobs during the mortgage approval process could raise concern and stymie your application.

Don't move money around or change banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will be reviewed as the lending institution makes decisions regarding your application. To avoid potential fraud, most lenders want a thorough paper trail to verify the source of all cash. Even for innocent purposes, moving around funds or changing banks could make it more difficult for your lending institution to document your bank history.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until closing. The earnest funds are to go toward your expenses upon closing; some individual sellers may not realize this. A neutral party, like an attorney can hold your earnest funds, or you may place them temporarily into a trust account until closing. The final disposition of earnest money, if your transaction falls through, should be specified in the purchase agreement with your seller.

New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Give us a call at (941) 366-5800.